sale of marstel terminals
Cranleigh recently advised the management team and 50% shareholder of Marstel Terminals, an Australasian bulk liquid storage operator, on the sale of its business to the Oslo-listed shipping company Stolt-Nielsen. Marstel owns and operates one of the largest networks of tank farms in Australasia.
Marstel Holdings Pty Limited (“Marstel”) is a major specialist, independent, bulk liquid terminal operators in Australia and New Zealand. It owns seven tank farms across three NZ locations, with many more on the eastern seaboard of Australia. Marstel’s management (and founders) were majority shareholder (55%), with a private equity firm Propel Investments holding the remaining 45%. In 2011 Propel Investments initiated a sale process for the company. While Marstel’s management agreed to the sale process in principle, they also wished to retain a shareholding in the business.
The Business Need
Cranleigh were engaged by Marstel’s management and majority shareholder to represent their interests in the sale process, both in respect of maximising the deal value from and to identify a compatible long term equity partner who would bring value to the company and assist with its continued success. This needed to be achieved within the context of the sale process being undertaken by a Propel Investments.
Accordingly, there were a number of competing priorities that needed to be managed, specifically between achieving the highest sale price and securing a committed equity investor who would bring additional value to the company.
The Cranleigh Solution
Cranleigh first step was to change the presumption of the sale process and make explicitly clear that a partial sale was the preferred options. Cranleigh also engaged with potential bidders to ensure that competing proposals were explicit about how they would work with the management team.
Cranleigh then engaged the shareholders to identify key value drivers and agree a set of attributes to assess the bidders (of which there were 150 bids lodged). Once the four most appropriate bids had been selected, Cranleigh obtained the right to negotiate directly with them to develop a shareholder agreement, including the requirement for bidders to fund a certain portion of the company so as to not dilute the existing management’s shares. Cranleigh also agreed management remuneration as part of the total solution. This had been tested in private to evaluate the bidders’ genuine ability to work cooperatively in joint venture arrangements.
Cranleigh’s expert advisory assistance not only resulted in the successful sale of the business, but also allowed the parties to progress the sale with terms favourable to them all.